April 8, New Delhi: Country’s largest lender, State Bank of India (SBI) has cut the Marginal Cost of Funds-based Lending Rates (MCLR) by 35 bps (100 bps = 1 per cent) across all tenors effective from April 10, 2020. This is the eleventh consecutive cut in MCLR announced by the bank in FY 2019-20.

SBI’s one-year MCLR now stands at 7.40 per cent per annum, down from 7.75 per cent per annum, the bank said in a statement. It added that EMIs on eligible home loan accounts (linked to MCLR) will get cheaper by around Rs 24.00 per 1 lakh on a 30 year loan.

SBI reduced the fixed deposit (FD) interest rate on March 10 this year, by 75 bps to 4.4 per cent. Meanwhile, the Reserve Bank of India (RBI) has slashed the repo rate and reverse repo rate by 75 bps and 90 bps, respectively, in view of the economic decline due to COVID-19. RBI’s repo rate currently stands at 4.4 per cent and reverse repo rate at 4 per cent.

"The reduction will benefit borrowers availing MCLR-linked fresh loans. Existing borrowers under the MCLR regime will continue to be charged with their existing lending rates till their next interest rate reset date. The banks’ MCLRs applicable on the interest rate reset dates of respective borrowers will be applicable till the next reset dates," Naveen Kukreja, CEO, Paisabazaar, said.

Further, SBI has realigned its interest rates on Savings Bank Deposits effective from April 15, 2020. The bank has reduced 25 bps for balances upto Rs 1 lakh, from 3 per cent to 2.75 per cent; and 25 bps for balances above Rs 1 lakh, from 3 per cent to 2.75 per cent.